A more thorough explanation:

A capital expense is an expenditure made by a business to provide a long-term benefit. It is not deductible, but it can be used for depreciation or amortization. Examples of capital expenses include buying a building, purchasing equipment, or investing in research and development.

For instance, if a company buys a new machine for $100,000, it cannot deduct the entire amount as an expense in the year of purchase. Instead, it can spread the cost over several years and deduct a portion of the expense each year.